The Iowa Hospital Association said Wednesday that a new report
shows that nearly 8,500 jobs in health care and related industries could be lost in Iowa in the next nine years because of federal reductions in Medicare spending.
Nationally, more than 766,000 jobs would be lost because of a 2 percent sequestration of Medicare spending mandated by the Budget Control Act of 2011. That's according to the report released today by the American Hospital Association, American Medical Association and American Nurses Association.
Most of the job losses would occur within the next year if the cuts move forward.
The limit on Medicare spending will not affect the benefits received by seniors, but rather, will be accomplished by reducing payments for health-care services, according to a press release by the Iowa Hospital Association.
The report, produced by Tripp Umbach, a firm specializing in conducting economic impact studies, measures the anticipated effect of these cuts in Medicare payments on health-care providers and other industries. The firm focused on how reductions in Medicare payments will lead to direct job losses in the health-care sector, and reduced purchases by health-care entities of goods and services from other businesses, which in turn will cause layoffs of workers.
This model estimates that, during the first year of the sequester, more than496,000 U.S. jobs will be lost, including nearly 5,500 in Iowa. The report found that the job losses will affect many economic sectors beyond health care. Health care represents 18 percent of the U.S. economy.